This case was last updated from Los Angeles County Superior Courts on 08/15/2019 at 09:23:12 (UTC).

THE ALEPYAN FAMILY TRUST VS. ALLEN HERSHBERG, ET AL

Case Summary

On 01/24/2018 THE ALEPYAN FAMILY TRUST filed a Property - Other Real Property lawsuit against ALLEN HERSHBERG. This case was filed in Los Angeles County Superior Courts, Van Nuys Courthouse East located in Los Angeles, California. The Judges overseeing this case are JOHN J. KRALIK, HUEY P. COTTON and SHIRLEY K. WATKINS. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****6776

  • Filing Date:

    01/24/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

JOHN J. KRALIK

HUEY P. COTTON

SHIRLEY K. WATKINS

 

Party Details

Plaintiff

THE ALEPYAN FAMILY TRUST

Defendants and Cross Plaintiffs

HERSHBERG ALLEN

MAGNUM PROPERTY INVESTMENTS LLC

COUNTY RECORDS RESEARCH INC.

NEXT GENERATION IS FBO ALLEN HERSHBERG

DOES 1 THROUGH 50 INCLUSIVE

PROVIDENT TITLE COMPANY

GONZALES ANTHONY S.

ALL PERSONS UNKNOWN CLAIMING ANY LEGAL

ORANGE COAST TITLE

CLEMENT MORRIS DOE 2

NEXT GENERATION TS FBO ALLEN HERSHBERG IRA 2750

CE ESCROW A CALIFORNIA CORPORATION DOE 3

Defendants and Cross Defendants

GONZALES ANTHONY S.

KIM LAURIE

CLEMENT MORRIS DOE 2

KARAPETYAN LEYLA INDIVIDUALLY AND AS TRUSTEE OF THE ALEPYAN FAMILY TRUST

NEXT GENERATION TS FBO ALLEN HERSHBERG IRA 2750

SOTO NORMA

ALEPYAN ZHIRAYR INDIVIDUALLY AND AS TRUSTEE OF THE ALEPYAN FAMILY TRUST

ALEPYAN ISABEL

Others

BURNS ELKANAH JOHNSON JR

COHEN HARRIS LINDLEY

7 More Parties Available

Attorney/Law Firm Details

Plaintiff Attorney

GILANIANS ALEXANDER

Defendant and Cross Defendant Attorneys

NUSSBAUM LANE M.

HALL HUGUENIN LLP

HALL GRIFFIN LLP

ATTLESEY KEITH A.

DOLAN ROBERT TRACEY

MARCUS STEPHEN HOWARD

SAFAR BRITTANY LAUREN

MORI DOUGLASS HISAKAZU

BROWN JOHN CLARK JR

LAPEDIS JACK MARSHALL

OBAGI ZEIN E JR

GOLDMAN JAMES

WARD JOHN P.

Cross Plaintiff and Cross Defendant Attorneys

BROWN JOHN CLARK JR

BURNS ELKANAH JOHNSON JR

COHEN HARRIS LINDLEY

 

Court Documents

Proof of Service (not Summons and Complaint)

7/2/2019: Proof of Service (not Summons and Complaint)

Declaration

7/2/2019: Declaration

Demurrer - without Motion to Strike

7/2/2019: Demurrer - without Motion to Strike

Opposition

7/11/2019: Opposition

Opposition

7/12/2019: Opposition

Proof of Personal Service

7/25/2019: Proof of Personal Service

Reply

7/29/2019: Reply

Reply

7/29/2019: Reply

Certificate of Mailing for

7/30/2019: Certificate of Mailing for

Minute Order

7/30/2019: Minute Order

Civil Case Cover Sheet

1/24/2018: Civil Case Cover Sheet

Complaint

1/24/2018: Complaint

Notice of Case Management Conference

1/24/2018: Notice of Case Management Conference

Summons

1/24/2018: Summons

Notice of Related Case

1/30/2018: Notice of Related Case

Notice of Lis Pendens

2/1/2018: Notice of Lis Pendens

Minute Order

2/20/2018: Minute Order

Ex Parte Application

2/20/2018: Ex Parte Application

199 More Documents Available

 

Docket Entries

  • 11/25/2019
  • Hearingat 10:00 AM in Department T at 6230 Sylmar Ave., Van Nuys, CA 91401; Non-Jury Trial

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  • 11/25/2019
  • Hearingat 10:00 AM in Department T at 6230 Sylmar Ave., Van Nuys, CA 91401; Jury Trial

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  • 09/24/2019
  • Hearingat 08:30 AM in Department T at 6230 Sylmar Ave., Van Nuys, CA 91401; Status Conference

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  • 08/26/2019
  • Hearingat 08:30 AM in Department T at 6230 Sylmar Ave., Van Nuys, CA 91401; Hearing on Demurrer - without Motion to Strike

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  • 08/26/2019
  • Hearingat 08:30 AM in Department T at 6230 Sylmar Ave., Van Nuys, CA 91401; Hearing on Demurrer - without Motion to Strike

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  • 08/05/2019
  • Docketat 08:30 AM in Department T, Shirley K. Watkins, Presiding; Hearing on Demurrer - without Motion to Strike - Not Held - Advanced and Continued - by Court

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  • 08/05/2019
  • Docketat 08:30 AM in Department T, Shirley K. Watkins, Presiding; Hearing on Demurrer - without Motion to Strike - Not Held - Advanced and Continued - by Court

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  • 07/30/2019
  • Docketat 09:00 AM in Department T, Shirley K. Watkins, Presiding; Non-Appearance Case Review

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  • 07/30/2019
  • DocketMinute Order ( (Non-Appearance Case Review)); Filed by Clerk

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  • 07/30/2019
  • DocketCertificate of Mailing for ((Non-Appearance Case Review) of 07/30/2019); Filed by Clerk

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293 More Docket Entries
  • 02/20/2018
  • DocketEx Parte Application (FOR AN ORDER RELATING CASE SOR IN THE ALTERNATIVE, SET MATTER FOR A HEARING ON A MOTION TO HAVE CASE RELATED); Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 02/20/2018
  • DocketMinute order entered: 2018-02-20 00:00:00; Filed by Clerk

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  • 02/20/2018
  • DocketOpposition (MAGNUM PROPERTY INVESTMENTS, LLC'S OPPOSTION TO PLAINTIFF'S EX PARTE APPLICATION FOR ORDER RELATING CASES)

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  • 02/20/2018
  • DocketDeclaration (OF CONNIE GUTIERREZ RE EX PARTE NOTICE); Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 02/01/2018
  • DocketNotice of Lis Pendens; Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 01/30/2018
  • DocketNotice of Related Case; Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 01/24/2018
  • DocketSummons; Filed by null

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  • 01/24/2018
  • DocketCivil Case Cover Sheet; Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 01/24/2018
  • DocketComplaint; Filed by Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (Plaintiff)

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  • 01/24/2018
  • DocketNotice of Case Management Conference; Filed by Clerk

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Tentative Rulings

Case Number: LC106776 Hearing Date: January 12, 2022 Dept: T

THE ALEPYAN FAMILY TRUST, et al.

Plaintiffs,

vs.

ALLEN HERSHBERG; et al.

Defendants.

CASE NO: LC106776

[TENTATIVE] ORDER RE:

DEFENDANT CLEMENT’S DEMURRER TO SECOND AMENDED COMPLAINT and MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT

Dept. T

8:30 a.m.

January 12, 2022

[TENTATIVE] ORDER:

Defendant Morris Clement’s Demurrer to Plaintiffs’ Second Amended Complaint is SUSTAINED:

  1. Defendant’s Demurrer to Plaintiffs’ first cause of action is SUSTAINED, without leave to amend.

  2. Defendant’s Demurrer to Plaintiffs’ second, third, fourth, and fifth causes of action is SUSTAINED, with 20 days leave to amend.

Defendant’s Motion to Strike Portions of Second Amended Complaint is MOOT because of the demurrer rulings.

INTRODUCTION

On October 5, 2021, Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust Dated November 11, 2013 (“Plaintiffs”), filed the operative Second Amended Complaint. The Second Amended Complaint alleges the following causes of action: (1) Conspiracy to Defraud; (2) Fraud; (3) Unfair Business Practices; (4) Restitution Based on Unjust Enrichment; and (5) Declaratory Relief.

On November 4, 2021, Defendant Morris Clement (“Defendant”) filed a Demurrer to Plaintiff’s Second Amended Complaint, challenging the sufficiency of each cause of action alleged therein. Concurrently, Defendant additionally filed a Motion to Strike Portions of Plaintiffs’ Second Amended Complaint, seeking to strike Plaintiffs’ Prayer for attorneys’ fees and punitive damages.

REQUEST FOR JUDICIAL NOTICE

  1. Plaintiffs’ Request for Judicial Notice

Plaintiffs’ Request for Judicial Notice is GRANTED, pursuant to Evidence Code section 452, subdivision (d) except not as to any hearsay contained. (Evid. Code, 452, subd. (d) [judicial notice may be taken of “[r]ecords of . . . any court of this state”].)

  1. Defendant’s Request for Judicial Notice

Defendant’s Request for Judicial Notice is GRANTED, pursuant to Evidence Code section 452, subdivision (d) except not as to any hearsay contained. (Evid. Code, 452, subd. (d) [judicial notice may be taken of “[r]ecords of . . . any court of this state”].)

DEMURRER TO SECOND AMENDED COMPLAINT

  1. Uncertainty

Defendant demurs to Plaintiffs’ Second Amended Complaint on the grounds of uncertainty.

A special demurrer to a complaint may be brought on the ground the pleading is uncertain, ambiguous, or unintelligible. (Code Civ. Proc., 430.10, subd. (f); Beresford Neighborhood Assn. v. City of San Mateo (1989) 207 Cal.App.3d 1180, 1191.) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) A demurrer for uncertainty may only be sustained when a defendant cannot reasonably determine to what he or she is required to respond. (Ibid.) For example, where it is not reasonably certain what issues must be admitted or denied, or what counts or claims are directed against the defendant, the complaint will be uncertain. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Following a review of the Second Amended Complaint, the Court finds that the Second Amended Complaint is defectively uncertain and ambiguous. Specifically, the Second Amended Complaint does not make clear whether the causes of action included therein are alleged by Plaintiffs within their capacities as Trustees of the Alepyan Family Trust Dated November 11, 2013, or alternatively, whether Plaintiffs’ assert each cause of action as assignees of former Defendants Allen Hershberg, Next Generation TS FBO Allen Hershberg IRA 2750 (“Next Generation IRA”), or Magnum Property Investments, LLC (collectively, “former Defendants”).

In January of 2021, during the pendency of this action, Plaintiffs signed a Settlement Agreement with the former Defendants, which was thereafter approved pursuant to the Court’s Order granting former Defendants’ Motion for Determination of Good Faith Settlement. (Defendant’s Request for Judicial Notice (“RJN”), Ex. C.) Pursuant the terms of the approved Settlement Agreement, former Defendants Allen Hershberg and Next Generation IRA agreed to assign to Plaintiffs “all claims that they may have against . . . [Defendant Morris] Clement . . . .” (Id., Ex. C at 9.) Plaintiffs acknowledge this assignment of claims within paragraph twenty-two (22) of the Second Amended Complaint, alleging “Hershberg and Next Generation IRA assigned certain claims (including some received from Magnum) to Plaintiffs.” (Second Amended Complaint (“SAC”), 22.) However, Plaintiffs fail to identify whether or not the causes of action alleged within the Second Amended Complaint are asserted by Plaintiffs in their own right, or as assignees of the former Defendants. In reviewing the Second Amended Complaint as it is currently pled, Defendant is left without guidance on how to respond to the causes of action. In order to avoid uncertainty and ambiguity, Plaintiffs should assert each cause of action separately with respect to the two (2) categories of possible claims—causes of action brought by Plaintiffs in their own right, alleging facts relevant thereto, and, on the other hand, causes of action brought by Plaintiffs as assignees of claims which may be advanced by the former Defendants, alleging facts relevant thereto. Plaintiffs’ combination of the two (2) categories of claims within a single cause of action will likely not be sufficient to cure the present ambiguity.

Further, the Court notes that Plaintiffs seemingly concede this point within their Opposition as Plaintiffs state they will seek to file a Third Amended Complaint which will clarify whether the causes of action alleged are brought within their own right, and/or as assignees of the former Defendants. (Opp., at p. 3:3-6 [“Secondly, the issue is moot since, in the Third Amended Complaint, Plaintiffs make clear that all causes of action are being asserted in their own right and/or as assignees of HERSHBERG/NEXT GENERATION IRA. In other words, there is nothing to differentiate.”].)

Accordingly, Defendant’s Demurrer on the grounds of uncertainty is SUSTAINED.

  1. First Cause of Action: Conspiracy to Defraud

Defendant demurs to Plaintiffs’ first cause of action for conspiracy to defraud.

In Opposition, Plaintiffs seemingly concede that their first cause of action has no merit and, similarly, do not oppose removal of such from the Second Amended Complaint. In the Opposition brief, Plaintiffs request that the Court permit their filing of a Third Amended Complaint, stating “the changes from the Second Amended Complaint to the proposed Third Amended Complaint do sufficiently address the issues raised by [Defendant] in his Opposition". (Opp., at p. 2:16-18.) Upon review of Plaintiffs’ proposed Third Amended Complaint, Plaintiffs have voluntarily removed their first cause of action for conspiracy to defraud. (Plaintiffs’ RJN, at Ex. 5.) Plaintiffs’ act of voluntarily removing the first cause of action from the Second Amended Complaint suggests that Plaintiffs concede this cause of action has no merit.

Accordingly, Defendant’s Demurrer to Plaintiffs’ first cause of action is SUSTAINED, without leave to amend.

  1. Second Cause of Action: Fraud

Third, Defendant demurs to Plaintiffs’ second cause of action for fraud.

“ ‘The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice. . . . This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Id., at p. 645 [italics in original].)

Here, following a review of the Second Amended Complaint, the Court finds Plaintiffs have failed to allege facts sufficient to constitute a cause of action for fraud. First, the Court would like to clarify that, despite Defendant’s demurring arguments, Plaintiffs have pled sufficient facts demonstrating that Defendant did engage in misrepresentation. Plaintiffs' Second Amended Complaint alleges that, on October 7, 2016, Defendant called Plaintiff Zhirayr Alepyan notifying him that he and his wife had purportedly signed a Deed of Trust and a Promissory Note, wherein Plaintiffs allegedly agreed to obtain a loan from former Defendant Next Generation IRA in the amount of $350,000 in exchange for the power to foreclose upon Plaintiffs’ residence in the event of default. (SAC, 38, 45.) Plaintiffs’ Second Amended Complaint alleges that Defendant made such a representation while knowing that the purported Deed of Trust and Promissory Note were fraudulently signed by third parties and not by Plaintiffs. (Id., 32, 39.) However, while Plaintiffs sufficiently plead a misrepresentation made by Defendant, Plaintiffs fail to plead any resulting damage from Defendant’s alleged misrepresentation. Plaintiffs’ Second Amended Complaint alleges that, as a result of the fraudulent Deed of Trust and Promissory Note, Plaintiffs suffered the loss of their residence, which was foreclosed upon during a non-judicial foreclosure sale on December 27, 2017. (SAC, 57.) However, following a review of the Settlement Agreement entered into by Plaintiffs and the former Defendants in this matter, Plaintiffs’ residence has since been reconveyed pursuant to a Rescission Deed, which has deemed the foreclosure sale invalid. (Defendant’s RJN, Ex. C at 3.) In Opposition, Plaintiffs have failed to address this fact or provide any argument as to any outstanding damages suffered as a result of Defendant’s actions and misrepresentations. (See generally Opp.)

Further, while Plaintiffs’ Opposition seems to suggest that Plaintiffs suffered damages as a result of Defendant obtaining the $350,000 fraudulent loan, this argument is misguided and contradicted by the expressed allegations within the Second Amended Complaint. Plaintiffs’ Second Amended Complaint alleges that, on June 30, 2016, Defendant’s company, Strategic Capital Investments, transferred $350,000 to CE Escrow, an escrow company, for the purposes of funding the purported fraudulent loan. (SAC, 7, 40.) Thereafter, on July 15, 2016, Plaintiffs allege that the funds were transferred from CE Escrow back to Defendant’s company, Strategic Capital Investments. (Id., 44.) Following a review of the facts alleged by Plaintiffs, it is difficult to ascertain the injury which resulted pursuant to the above transaction as it merely appears Defendant was returned his own assets. Additionally, the funds obtained by Defendant were not those of Plaintiffs. Accordingly, the Court is unable to find that Plaintiffs have sufficiently alleged an injury resulting from Defendant’s purported misrepresentation.

Additionally, while Plaintiffs do not expressly contend the Second Amended Complaint has properly alleged facts with respect to any assigned claim of fraud from the former Defendants, the Court is unable to find that any such claim has been properly alleged. Plaintiffs’ Second Amended Complaint fails to plead any misrepresentation made by Defendant to the former Defendants. Rather, Plaintiffs’ Second Amended Complaint pleads that Defendants and the former Defendants, collectively, engaged in a fraudulent scheme to forge a Deed and Trust and Promissory Note with Plaintiffs’ signatures. (SAC, 32 [“With Gonzales allegedly as the notary, [CE Escrow] as the escrow company, Sorto as the escrow office, PT as trustee, as well as Hershberg and Next Generation IRA as the purported lender(s), the Defendants, including Clement and SCI, concocted and participated in a scheme to pass money through [CE Escrow] into their own pocketbooks by willfully and maliciously defrauding and deceiving the Plaintiffs who were unaware that anything was taking place.”].) Plaintiffs’ Second Amended Complaint is devoid of any allegations establishing that Defendant sought to defraud the former Defendants, but instead, Plaintiffs’ Complaint pleads that Defendant and former Defendants “worked together to commit fraud and theft upon the Plaintiffs”. (Id., 31.) Thus, the Court is unable to find that Plaintiffs have pled a sufficient cause of action for fraud in their capacity as assignees.

To the extent Defendant argues that the sum of Plaintiffs’ assigned claims are barred by the statute of limitations, the Court exercises its discretion to refrain from entertaining such an argument considering Plaintiffs’ Second Amended Complaint is largely devoid of any facts to suggest that Plaintiffs’ assigned claims are so barred.

Based on the foregoing, Defendant’s Demurrer to Plaintiffs’ second cause of action is SUSTAINED, with leave to amend.

  1. Third Cause of Action: Unfair Business Practices

Fourth, Defendant demurs to Plaintiff’s third cause of action for unfair business practices pursuant to Business and Professions Code section 17200.

Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) In order to have standing to pursue a cause of action pursuant to Business and Professions Code section 17200, a plaintiff must allege he or she has suffered injury in fact and has lost money or property as a result of Defendant’s unfair competition. (See Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 555-56; see also Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 324 [holding a plaintiff must have lost money or property to have standing to allege a UCL claim].) “[A]n identifiable trifle [of injury] is enough for standing . . . .” (Id., at 561.)

Here, Plaintiffs’ Second Amended Complaint fails to plead any injury by way of lost property or lost money in order to provide Plaintiffs with standing to pursue a cause of action pursuant to Business and Professions Code section 17200. Plaintiffs’ Second Amended Complaint alleges that Defendant engaged in unfair, unlawful, or fraudulent business practices which have deprived Plaintiffs of title to their residence. (SAC, 72.) However, as noted above, pursuant to the Settlement Agreement, which Plaintiff references in the Second Amended Complaint, Plaintiffs have been reconveyed the subject property pursuant to a Rescission Deed which has deemed the foreclosure sale invalid. (Defendant’s RJN, Ex. C at 3.) Additionally, Plaintiffs have failed to plead the loss of money as a result of Defendant’s alleged unfair, unlawful, or fraudulent business practices. As noted above, the money purportedly transferred to Defendant was his own, and did not belong to Plaintiffs. (SAC, 7, 40, 44.) Accordingly, the Court is unable to find Plaintiffs have pled sufficient facts establishing standing pursuant to Business and Professions Code section 17200.

Therefore, Defendant’s Demurrer to Plaintiffs’ third cause of action is SUSTAINED, with leave to amend.

  1. Fourth Cause of Action: Restitution Based on Unjust Enrichment

Fifth, Defendant demurs to Plaintiffs’ fourth cause of action for restitution based on unjust enrichment.

The elements for a claim of unjust enrichment are “receipt of a benefit and [the] unjust retention of the benefit at the expense of another.” (Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726, 91 Cal.Rptr.2d 881.) “Unjust enrichment is an equitable principle that underlies ‘various legal doctrines and remedies.’ [Citation.] It is based on the idea that ‘one person should not be permitted unjustly to enrich himself at the expense of another, but should be required to make restitution of or for property or benefits received, retained, or appropriated, where it is just and equitable that such restitution be made, and where such action involves no violation or frustration of law or opposition to public policy, either directly or indirectly.’ [Citations.]” (County of San Bernardino v. Walsh (2007) 158 Cal.App.4th 533, 542.) “Where ‘a benefit has been received by the defendant but the Plaintiffs has not suffered a corresponding loss or, in some cases, any loss, but nevertheless the enrichment of the defendant would be unjust . . . [t]he defendant may be under a duty to give to the Plaintiffs the amount by which [the defendant] has been enriched.’ [Citation.]” (Ibid.)

Here, Plaintiffs’ Second Amended Complaint fails to allege a cause of action for unjust enrichment. More specifically, Plaintiffs’ Second Amended Complaint fails to plead Defendant’s wrongful or unjust receipt of a benefit. Plaintiffs’ Second Amended Complaint states that the alleged unjust enrichment involved Defendant receiving the proceeds of the subject $350,000 loan which was allegedly “fraudulently obtained pursuant to forgeries”. (SAC, 71.) However, as articulated above, Defendant’s possession of the loan proceeds does not constitute Defendant’s unjust retention of a benefit which belonged to another. Rather, the sum of the relevant loan belonged to Defendant, and Defendant merely was returned the funds he previously owned. (SAC, 7, 40, 44.) Accordingly, the Court is unable to find that Plaintiffs’ Second Amended Complaint has sufficiently alleged a cause of action for unjust enrichment.

Thus, Defendants’ Demurrer to Plaintiffs’ fourth cause of action is SUSTAINED, with leave to amend.

  1. Fifth Cause of Action: Declaratory Relief

Lastly, Defendant demurs to Plaintiffs’ fifth cause of action for declaratory relief.

Here, as the Court finds Plaintiffs have failed to state facts sufficient to support the sum of the causes of action alleged within the Second Amended Complaint, the Court must conclude the same for Plaintiffs’ cause of action for declaratory relief. (See City of Cotati v. Cashman (2002) 29 Cal.4th 69, 80 [“. . . ‘a request for declaratory relief will not create a cause of action that otherwise does not exist.’”]; see also Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal.App.4th 1336, 1347 [declaratory relief cause of action cannot exist without valid underlying claim].)

Accordingly, Defendants’ Demurrer to Plaintiffs’ fifth cause of action is SUSTAINED, with leave to amend.

MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT

Pursuant to the Court’s ruling upon Defendant’s Demurrer to Plaintiffs’ Second Amended Complaint, Defendant’s Motion to Strike Portions of Plaintiffs’ Second Amended Complaint is now MOOT.

IT IS SO ORDERED, CLERK TO GIVE NOTICE.

January 12, 2022

Shirley K. Watkins, Judge of the Superior Court

Case Number: LC106776    Hearing Date: April 15, 2021    Dept: T

ZHIRAYR ALEPYAN AND LEYLA KARAPETYAN, AS TRUSTEES, etc.,

Plaintiff,

vs.

ALLEN HERSHBERG; et. al.

Defendants.

CASE NO: LC106776

[TENTATIVE] ORDER RE:

MOTION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

Dept. T

8:30 a.m.

Hearing date: April 9, 2021

[TENTATIVE] ORDER: The Motion for Determination of Good Faith Settlement filed on 2/16/2021 is GRANTED.

1. INTRODUCTION

Plaintiffs Zhirayr Alepyan and Leyla Karapetyan, as Trustees of the Alepyan Family Trust dated November 11, 2003 (collectively “Alepyans”) and Defendants, Allen Hershberg, individually and trustee of the Allen Hershberg IRA (“Hershberg”), Next Generation TS FBO Allen Hershberg IRA 2750 (“Next Generation”), and Magnum Property Investments, LLC (“Magnum”) (collectively “Settling Parties”) move for determination of good faith settlement as to their Amended Settlement Agreement (“ASA”.) Defendant, Cross-Defendant, and Cross-Complainant County Records Research, Inc. (“CRR”) opposes the motion.

2. PROCEDURE

A. Jurisdiction And Reconsideration

CRR asserts that the Court lacks jurisdiction to hear the instant motion on the argument that the exclusive remedy to challenge the determination on the prior application to determine good faith settlement (filed August 26, 2020) and/or the prior motion to contest the application for good faith settlement (filed September 21, 2020) is a writ of mandate or an appeal. CCP §877.6(e); Main Fiber Products, Inc. v Morgan & Franz Insurance Agency 73 Cal. App. 4th 1130, 1136-37 (“Main Fiber”); O’Hearn v Hillcrest Gym & Fitness Center, Inc. (2nd DCA, 2004) 115 Cal. App. 4th 491, 499 (“O’Hearn”). It is noted that these motions were originally heard on November 10, 2020. The Court sought clarification on certain issues and allowed further briefing. The Settling Parties, in response to the Court’s request for clarification, filed an “Amendment to the Settlement Agreement” (which was found to be inadmissible) and the matter was again argued on November 25, 2020. The Court took the matter under submission and issued its ruling on December 21, 2020.

In the Main Fiber case and the O’Hearn case, the aggrieved party on the ruling on the motion to determine good faith settlement stood on the settlement agreement that the Court ruled upon. There was no amendment made to the settlement agreement at issue in Main Fiber and O’Hearn. However, in the instant case, the Settling Parties show that they renegotiated additional terms into the prior Settlement Agreement (“SA”) after the Court’s December 21, 2020 ruling. The Settling Parties entered into the “Amended Settlement Agreement” (“ASA”) in January 2021. (Settling Parties Appendix of Exhibits, Exh. 16.) The Court notes that the Settling Parties identify eight alleged amendments to the SA. (Reply, pg. 6:1-22.) However, of the eight alleged amendments, the Court notes that three of the alleged amendments in the Amended Settlement Agreement (“ASA”)[ASA ¿5(b) = SA ¿5(b). ASA ¿6(a) = SA ¿6(b). ASA ¿6(b) = SA ¿6(a)] are terms that were in the SA and thus are not material changes to the terms of the SA. The remaining five amendments [i.e.: ASA ¿¿ 4(b), 6(c), 6(d), 7(b) and 12(c)] appear to be new terms not found in the SA. It is noted that there is no legal authority directly on point in order to provide guidance on how to proceed when a ruling has been made on a settlement’s good faith status and subsequently the parties amend the settlement agreement. This situation appears to be one of first impression. It can be argued that amending the SA is an “end run around” the time limits and procedures set in CCP §877.6(e) to seek writ or appellate review of the Court’s prior ruling. Further, there are no standards of review to determine how much of a change to a settlement agreement merits a determination of a substantial or material change to show that a new agreement has been entered or even if “substantiality or materiality” would be required. However, it can also be argued that the parties should not be restrained from continued negotiations to enter a “new” settlement based upon the public policy that encourages settlement of disputes.

CRR then argues that the instant motion should be considered a motion for reconsideration of the Court’s December 21, 2020 Order. However, the underlying policy still remains that parties are encouraged to settle and there is adequate showing by Settling Parties that they continued negotiations in January 2021 and entered the ASA. With the ASA at issue, the Court cannot consider the instant motion under CCP §1008 because the ASA was not at issue previously. CRR’s attempt to characterize the motion as a reconsideration motion is not persuasive.

Accordingly, the court finds that it may hear the motion as to the ASA and further relies upon the general policy that encourages settlement and will review the motion on the merits.

B. Continuance

For electronic service of motions, the 16-court-days' notice period is extended by 2 court (not calendar) days. CCP § 1010.6(a)(4). The proof of service on the motion shows service by electronic service on February 12, 2021. The deadline for timely service via electronic service based upon the original March 9, 2021 hearing date was February 11, 2021. Service of the instant motion is one day untimely. However, the Court finds that CRR did not suffer sufficient prejudice in that the opposition presents procedural and substantive arguments against the motion.

Despite CRR’s contention that the instant motion is a “disguised” motion for summary judgment (“MSJ”), there are no facts or argument to support the contention and the Court does not see the motion as a “disguised” MSJ.

CRR requests a continuance to conduct discovery on the grounds that CRR’s principal is medically unavailable to participate in the defense of the instant motion. However, CRR’s request does not identify what facts they will garner from their own principal, Mr. Phelan, and does not provide which Tech-Bilt factor it would potentially support. It is noted that City of Grand Terrace v Sup. Ct. (Boyter) (1987) 192 Cal. App. 3d 1251, 1265 allowed for a continuance to conduct discovery to obtain evidence to support an opposing party’s burden to show lack of good faith by way of the settlor’s financial condition. CRR does not identify the Tech-Bilt element that is at issue and what evidence Mr. Phelan possesses to support such element. It is unforeseeable that Mr. Phelan, CRR’s principal, would have any evidence as to the Settling Parties’ financial condition or insurance. CRR’s request for continuance to conduct discovery is not persuasive.

3. DISCUSSION

At the hearing on the motion, the party claiming the settlement was not in good faith has the burden of proof on this issue. CCP § 877.6(d). CRR first argues that the ASA fails to show good faith based upon the same grounds reviewed in the prior motions. However, the grounds for denial on the prior motions do not apply in that the Settling Parties have entered into the ASA which was not at issue on the prior motions.

CRR then argues that their equitable indemnification and contribution claims against Alepyans and Hershberg will be barred which makes the ASA lack good faith. Of course, the mere fact that there will be a bar to equitable indemnification and contribution claims does not make the settlement per se not in good faith. In reviewing that issue, a key factor is the settling tortfeasor's potential liability for indemnity to joint tortfeasors. Long Beach Memorial Med. Ctr. v. Sup.Ct. (Connors) (2009) 172 Cal. App. 4th 865, 873. It is CRR’s burden to show that the settlement is so far “out of the ballpark” as to be inconsistent with the equitable goals of CCP §877.6. Id. Preliminarily, CRR cannot be a joint tortfeasor with the Alepyans as to the First Amended Complaint (“FAC”) filed by the Alepyans simply by the fact that the Alepyans are the filing plaintiffs. On the FAC, CRR, Hershberg and Magnum, as co-defendants, are alleged to be joint tortfeasors and it is these equitable indemnity and contribution claims that are at issue. Further, as to Magnum’s First Amended Cross-Complaint (“FACC”), CRR is alleged to be a joint tortfeasor with Hershberg and the Alepyans, including Isabel Alepyan and CRR’s equitable indemnification and contribution can be potentially barred by a good faith determination.

Preliminarily, CRR’s opposition does not present argument to show that the Settling Parties’ settlement is so far out of the ballpark as to be inconsistent with the goals of CCP §877.6. However, the Settling Parties provide facts to aid in determining this issue. As to the FAC, the Settling Parties present evidence to show Alepyans’ rough approximation of their total recovery. Alepyans’ approximate recovery includes the value of the property, approximately $481,000, based upon the amount paid by Magnum at the trustee sale (Buxer Decl. ¿7), Alepyans’ incursion of attorney fees, approximately $250,000 (Alepyan Decl. ¿32), and Alepyans’ payment of rent to Magnum, $26,500 (Alepyan Decl. ¿30.) Lastly, Alepyans provide that they paid property taxes in the amount of $34,255.41. (Alepyan Decl. ¿31.) Thus, the approximate total recovery on the FAC is about $791,755.41. Magnum is agreeing to pay to Alepyans approximately $481,000 in that Magnum agreed to execute a rescission of the Trustee Deed Upon Sale (“TDUS,”) which returns title ownership of the property to the Alepyans (ASA ¿3.) In order for Magnum to agree to rescind the TDUS, Hershberg is agreeing to pay (and has paid) Magnum approximately $529,825.60 (ASA Recitals ¿h) as well as an additional $752.33 which will increase at a daily rate of $.27. (ASA ¿2.) Further, Hershberg is agreeing to pay to Magnum 50% of funds recovered from third parties that allegedly received monies paid by Magnum at the trustee sale. This amount disbursed to third parties from the trustee sale is allegedly $263,231.80 (ASA ¿5.b.) Therefore, the amounts paid by the Settling Parties to settle Alepyans’ FAC is a minimum of $529,825.60 and potentially could increase by $131,615.90 (potential total payment being $661,441.50.) Considering Alepyans’ approximate total recovery at $791,755.41 and the Settling Parties minimum payment of $529,825.60, the Settling Parties are covering approximately 67% of Alepyans’ damages. This would leave CRR, as the non-settling party, with approximately 33% of Alepyans’ damages ($261,929.81), if found liable. In addition to the review of these amounts, it is further noted that the Settling Parties have agreed to limit/cap CRR’s damages to $226,500 and expressly identified CRR as a third party beneficiary to the ASA (ASA ¿7.b.) The capping of CRR’s damages to be paid to the Alepyans’ claims (now assigned to Hershberg per ASA ¿7.a.) makes CRR’s potential liability less than 33%. Going back to CRR’s contention regarding the loss of equitable indemnification and contribution claims against Settling Parties, the less than 33% potential liability that CRR faces on the FAC and CRR could potentially seek indemnity for is not seen to be unreasonable in light of the fact that two of the three Defendants from the FAC (i.e.: the Settling Parties) are potentially bearing a little more than 2/3 of Alepyans’ damages.

It is further seen that Alepyans’ total recovery has the potential of increasing if this action is taken to trial in that additional fees and costs will be expended in trying the case. With the potential of increased damages, the settlement amounts appear to be a lesser payment compared to the potential damages assessed if the action were to go to trial.

The motion is seen to be persuasive and CRR has not met their burden to show a lack of good faith based upon its contention that they will lose their claims for equitable indemnification/contribution, at least as to the FAC.

As to Magnum’s FACC, CRR is seen to be alleged joint tortfeasors with Hershberg and the Alepyans (including Isabel Alepyan) since they are Co-Cross-Defendants in the FACC. Magnum’s rough approximation of its total recovery is $859,507.75, which includes the purchase price of the property (Buxer Decl. ¿11.) As stated above, Hershberg is paying/has paid Magnum $529,825.60 (ASA Recitals ¿h) as well as an additional $752.33 which will increase at a daily rate of $.27. (ASA ¿2.) Further, Hershberg is agreeing to pay to Magnum 50% of funds recovered from third parties that allegedly received monies paid by Magnum at the trustee sale. This amount disbursed to third parties from the trustee sale is allegedly $263,231.80 (ASA ¿5.b.)

Hershberg as a Settling Party is paying approximately 62% of Magnum’s approximate damages based solely upon the amount paid so far. Alepyans are agreeing to assign/release to Magnum $67,103.15, the overbid amount from the trustee sale (ASA ¿6.a.) and are agreeing to allow Magnum to retain the $26,250 which is the alleged rental payments paid to Magnum (ASA ¿6.b.) Alepyans further forego their claim as to $34,225.41 paid in property taxes after the trustee sale. (ASA ¿6.c.) The Alepyans are agreeing to pay/forego a total of $127,578.56, which represents approximately 15% of Magnum’s approximate damages. With Hershberg’s payment, the Settling Parties are covering 77% of Magnum’s damages, thus leaving a balance of 22% of Magnum’s damages to CRR, approximately $202,103.59, which potentially could be further reduced dependent upon whether Hershberg prevails on claims against third parties. In that Settling Parties’ proportionate liability under the ASA is 77% of Magnum’s approximate damages, there is sufficient showing that the settlement amount for Magnum’s FACC is within the ballpark of the statute’s equitable goals. The potential loss of equitable indemnity and contribution claims by CRR for potentially 22% of Magnum’s damages is not seen to be significant factor in showing a lack of good faith.

As to the element of the Settling Parties financial condition and/or insurance policy limits. Hershberg attests to having a title insurance policy with a $350,000 policy limit. (Hershberg Decl. ¿9, Exh. 19.) In that Hershberg is paying/paid $529,825.60 to Magnum, there is sufficient showing that Hershberg paid over his policy limit. Because of the excess payment, there is no showing of any disproportionality with the settlement payment.

Lastly, with the percentages as to Alepyans’ and Magnum’s approximate damages and the amount being paid in settlement, there is sufficient facts to show that the Settling Parties did not intend to make CRR pay more than its fair share. In that CRR does not appear to be at risk of paying more than its fair share, there is insufficient showing of any collusion, fraud, or tortious conduct between the Settling Parties.

4. CONCLUSION

The motion for determination of good faith settlement is persuasive and CRR has not met their burden of proof per CCP §877.6(d). The court finds the settlement to be in good faith. The court has separately ruled on evidentiary objections.

IT IS SO ORDERED, CLERK TO GIVE NOTICE.

Case Number: LC106776    Hearing Date: March 9, 2021    Dept: T

TENTATIVE RULING

THE ALEPYAN FAMILY TRUST LC106776

3/9/2021

MOTION FOR GOOD FAITH SETTLEMENT

THE MOTION IS CONTINUED.  UPON REVIEW, THE MOTION WAS NOT IN THE COURT FILE.  THE MOTION WAS NOT UPLOADED BY THE FILING CLERK FOR THE COURT'S REVIEW UNTIL 11:30 A.M. ON 3/8/2021 AND THEN ONLY AFTER INQUIRY BY THE DEPARTMENT.  ACCORDINGLY, THE COURT HAS NOT READ THE MOTION.  THE MOTION AND STATUS CONFERENCE IS CONTINUED TO 3/26/2021 AT 8:30 A.M. IN ORDER TO ALLOW THE COURT TO WORK UP THE MOTION.

OTHER THAN OBJECTIONS TO EVIDENCE, NO FURTHER PLEADINGS ARE ALLOWED TO BE FILED RE THIS MOTION.

CLERK TO GIVE NOTICE.

TSC IN MAGNUM 18VEUD00230 ALSO CONTINUED TO 3/26/2021 AT 8:30 A.M.

Case Number: LC106776    Hearing Date: November 25, 2020    Dept: T

ALEPYAN V. HERSHBERG

LC106776

11/25/2020

MOTION TO CONTEST APPLICATION FOR DETERMINATION OF GOOD FAITH SETTLEMENT

TENTATIVE RULING: HEAR ARGUMENT

Case Number: LC106776    Hearing Date: October 06, 2020    Dept: T

LC106776 10/6/2020

ALEPYAN V HERSHBERG

Motion to file amended cross-complaint

The court will hear argument

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